To make child care more affordable for working families and for stay-at-home parents with children under the age of 4, to double the number of children receiving child care assistance, to provide for after-school care, and to improve child care safety and quality and enhance early childhood development.

To make child care more affordable for working families and for stay-at-home parents with children under the age of 4, to double the number of children receiving child care assistance, to provide for after-school care, and to improve child care safety and quality and enhance early childhood development.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Affordable and Quality Child Care Act of 1998’.

SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I--FUNDING FOR CHILD CARE

Sec. 101. Child care subsidy funding.

TITLE II--DEPENDENT CARE TAX CREDIT REFORM

Sec. 201. Increase in dependent care tax credit; equivalent benefit where one parent stays at home to provide child care for child under age 4.

Subtitle C--Sense of the Congress

TITLE I--FUNDING FOR CHILD CARE

SEC. 101. CHILD CARE SUBSIDY FUNDING.

(1) by redesignating subsections (b), (c), and (d) as subsections (d), (e), and (f), respectively; and

(2) by inserting after subsection (a) the following:

‘(b) CHILD CARE SUBSIDY FUNDING-

‘(1) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated to carry out this subsection--

‘(A) $1,155,000,000 for fiscal year 1999;

‘(B) $1,280,000,000 for fiscal year 2000;

‘(C) $1,400,000,000 for fiscal year 2001;

‘(D) $1,600,000,000 for fiscal year 2002; and

‘(E) $2,065,000,000 for fiscal year 2003.

‘(2) RESERVATION AND ALLOTMENT OF FUNDS-

‘(A) AMONG INDIAN TRIBES- The Secretary shall reserve 2 percent of the total amount appropriated pursuant to paragraph (1) of this subsection for any fiscal year for payments to Indian tribes. From the amount so reserved for a fiscal year, the Secretary shall allot to an Indian tribe for the fiscal year an amount that bears the same proportion to the amount so reserved as the proportion of funds provided to the Indian tribe under section 658O(c) of the CCDBG Act for the fiscal year bears to the total amount paid to all Indian tribes under such section for the fiscal year.

‘(B) QUALITY ASSURANCE AND QUALITY IMPROVEMENT ACTIVITIES- From all amounts appropriated pursuant to paragraph (1) of this subsection, the Secretary shall reserve an aggregate of $1,000,000, which shall be available only for quality assurance and quality improvement activities relating to programs under the CCDBG Act.

‘(C) AMONG THE STATES AND TERRITORIES- The Secretary shall allot the total amount appropriated pursuant to paragraph (1) of this subsection for a fiscal year that remains after applying subparagraphs (A) and (B) of this paragraph for the fiscal year, among the States and the territories pursuant to the formula specified in section 403(n) (as such section was in effect before August 22, 1996), without regard to any limitation imposed by section 1108.

‘(3) MATCHING PAYMENTS TO STATES AND TERRITORIES-

‘(A) IN GENERAL- Notwithstanding section 1108, the Secretary shall pay to each State and territory for a fiscal year an amount equal to the lesser of--

‘(i) the amount allotted to the State or territory for the fiscal year under paragraph (2)(C) of this subsection; or

‘(ii) 80 percent of expenditures by the State or territory during the fiscal year--

‘(I) that are for any purpose authorized under the approved plan of the State or territory under the CCDBG Act;

‘(II) that, in the case of a State, are in excess of expenditures necessary to secure payment of the full amount of the State’s allotment (if any) under subsection (a)(2) of this section (determined without regard to subparagraph (D) thereof); and

‘(III) for which Federal matching payments or reimbursements are not otherwise authorized to be made.

‘(B) REDISTRIBUTION- Subsection (a)(2)(D) shall apply to amounts allotted to States under this subsection.

‘(4) PAYMENTS TO INDIAN TRIBES- The Secretary shall pay to an Indian tribe for a fiscal year an amount equal to the lesser of--

‘(A) the amount allotted to the Indian tribe under paragraph (2)(A) of this subsection for the fiscal year; or

‘(B) the total amount of expenditures by the Indian tribe during the fiscal year for purposes authorized under the CCDBG Act for which Federal payments are not otherwise authorized to be made.

‘(5) TARGETING OF FUNDS-

‘(A) CHILD CARE ASSISTANCE FOR WORKING NON-WELFARE FAMILIES- A State or territory to which amounts are provided under this subsection shall use not less than 70 percent of the amounts for child care assistance to working families who are not recipients of assistance under the State or territory program funded under section 403(a)(1).

‘(B) CHILD CARE ASSISTANCE FOR YOUNG CHILDREN- A State or territory to which amounts are provided under this subsection shall use not less than 40 percent of the amounts for child care assistance for children who have not attained 4 years of age.’.

(b) INCLUSION OF TERRITORIES IN DEFINITIONS- Section 418(f) of such Act, as so redesignated by subsection (a)(1) of this section, is amended to read as follows:

(2) Section 418(c) of such Act, as so redesignated by subsection (a)(1) of this section, is amended in paragraphs (1) and (2) by striking ‘under this section’ each place it appears and inserting ‘under subsection (a)’.

TITLE II--DEPENDENT CARE TAX CREDIT REFORM

SEC. 201. INCREASE IN DEPENDENT CARE TAX CREDIT; EQUIVALENT BENEFIT WHERE ONE PARENT STAYS AT HOME TO PROVIDE CHILD CARE FOR CHILD UNDER AGE 4.

(a) IN GENERAL- Paragraph (2) of section 21(a) of the Internal Revenue Code of 1986 (relating to expenses for household and dependent care services necessary for gainful employment) is amended to read as follows:

‘(2) APPLICABLE PERCENTAGE DEFINED- For purposes of paragraph (1), the term ‘applicable percentage’ means 50 percent reduced (but not below 20 percent) by 1 percentage point for each $1,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $30,000.’

(b) EQUIVALENT OF INCREASED BENEFIT WHERE PARENT STAYS AT HOME TO PROVIDE CHILD CARE FOR CHILD UNDER AGE 4-

(1) IN GENERAL- Section 24 of such Code (relating to child tax credit) is amended by redesignating subsections (e) and (f) as subsections (f) and (g), respectively, and by inserting after subsection (e) the following new subsection:

‘(f) Additional Credit if Taxpayer has Qualifying Child Under Age 4-

‘(1) IN GENERAL- If any qualifying child of the taxpayer is a young child, the credit allowed by subsection (a) shall be increased by the increased dependent care credit equivalent amount.

‘(2) INCREASED DEPENDENT CARE CREDIT EQUIVALENT AMOUNT- For purposes of paragraph (1), the term ‘increased dependent care credit equivalent amount’ means, with respect to any taxable year beginning in a calendar year, an amount equal to--

‘(A) the amount estimated by the Secretary (for taxable years beginning in the preceding calendar year) as being equal to the average employment-related expenses which are taken into account under section 21(a) by taxpayers who have only one qualifying individual and that qualifying individual is a young child, multiplied by

‘(B) the percentage equal to the excess (if any) of--

‘(i) the percentage applicable to the taxpayer under section 21(a)(2), over

‘(ii) the percentage which would be applicable to the taxpayer under section 21(a)(2) as in effect on the day before the date of the enactment of this paragraph.

‘(3) YOUNG CHILD- For purposes of this subsection, the term ‘young child’ means any individual who has not attained the age of 4 as of the close of the calendar year in which the taxable year of the taxpayer begins.

‘(4) COORDINATION WITH DEPENDENT CARE CREDIT- Credit shall be allowed under this subsection to a taxpayer for a taxable year only if the taxpayer elects not to have section 21 apply for such year.’

(1) Section 21 of such Code is amended by adding at the end the following new subsection:

‘(c) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 1999, the $30,000 amount contained in subsection (a) and the $2,400 amount in subsection (c) shall be increased by an amount equal to--

‘(1) such dollar amount, multiplied by

‘(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting ‘calendar year 1998’ for ‘calendar year 1992’ in subparagraph (B) thereof.

If the increase determined under the preceding sentence is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.’

(2) Paragraph (2) of section 21(c) of such Code is amended by striking ‘$4,800’ and inserting ‘twice the dollar amount applicable under paragraph (1)’.

(3) Paragraph (2) of section 21(d) of such Code is amended by striking ‘less than--’ and all that follows through the end of the first sentence and inserting ‘less than 1/12 of the amount which applies under subsection (c) to the taxpayer for the taxable year.’

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1998.

(a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following new section:

‘SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

‘(a) IN GENERAL- For purposes of section 38, the employer-provided child care credit determined under this section for the taxable year is an amount equal to 25 percent of the qualified child care expenditures of the taxpayer for such taxable year.

‘(b) DOLLAR LIMITATION- The credit allowable under subsection (a) for any taxable year shall not exceed $150,000.

‘(i) which is to be used as part of a qualified child care facility of the taxpayer,

‘(ii) with respect to which a deduction for depreciation (or amortization in lieu of depreciation) is allowable, and

‘(iii) which does not constitute part of the principal residence (within the meaning of section 121) of the taxpayer or any employee of the taxpayer,

‘(B) for the operating costs of a qualified child care facility of the taxpayer, including costs related to the training of employees, to scholarship programs, and to the providing of increased compensation to employees with higher levels of child care training,

‘(C) under a contract with a qualified child care facility to provide child care services to employees of the taxpayer,

‘(D) under a contract to provide child care resource and referral services to employees of the taxpayer, or

‘(E) for the costs of seeking accreditation from a child care credentialing or accreditation entity.

‘(2) QUALIFIED CHILD CARE FACILITY-

‘(A) IN GENERAL- The term ‘qualified child care facility’ means a facility--

‘(i) the principal use of which is to provide child care assistance, and

‘(ii) which meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including, but not limited to, the licensing of the facility as a child care facility.

Clause (i) shall not apply to a facility which is the principal residence (within the meaning of section 121) of the operator of the facility.

‘(B) SPECIAL RULES WITH RESPECT TO A TAXPAYER- A facility shall not be treated as a qualified child care facility with respect to a taxpayer unless--

‘(i) enrollment in the facility is open to employees of the taxpayer during the taxable year,

‘(ii) services available at such facility do not discriminate in favor of employees of the taxpayer who are highly compensated employees (within the meaning of section 414(q)), and

‘(iii) in the case of a facility which is owned or operated by the taxpayer, at least 30 percent of the enrollees of such facility

are dependents of employees of the taxpayer.

‘(d) RECAPTURE OF ACQUISITION AND CONSTRUCTION CREDIT-

‘(1) IN GENERAL- If, as of the close of any taxable year, there is a recapture event with respect to any qualified child care facility of the taxpayer, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of--

‘(A) the applicable recapture percentage, and

‘(B) the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted if the qualified child care expenditures of the taxpayer described in subsection (c)(1)(A) with respect to such facility had been zero.

‘(2) APPLICABLE RECAPTURE PERCENTAGE-

‘(A) IN GENERAL- For purposes of this subsection, the applicable recapture percentage shall be determined from the following table:

--The applicable

--recapture

‘If the recapture event occurs in:

--percentage is:

Years 1-3

--100

Year 4

--85

Year 5

--70

Year 6

--55

Year 7

--40

Year 8

--25

Years 9 and 10

--10

Years 11 and thereafter

--0.

‘(B) YEARS- For purposes of subparagraph (A), year 1 shall begin on the first day of the taxable year in which the qualified child care facility is placed in service by the taxpayer.

‘(3) RECAPTURE EVENT DEFINED- For purposes of this subsection, the term ‘recapture event’ means--

‘(A) CESSATION OF OPERATION- The cessation of the operation of the facility as a qualified child care facility.

‘(B) Change in ownership-

‘(i) IN GENERAL- Except as provided in clause (ii), the disposition of a taxpayer’s interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable.

‘(ii) AGREEMENT TO ASSUME RECAPTURE LIABILITY- Clause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership).

‘(4) Special rules-

‘(A) TAX BENEFIT RULE- The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.

‘(B) NO CREDITS AGAINST TAX- Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under subpart A, B, or D of this part.

‘(C) NO RECAPTURE BY REASON OF CASUALTY LOSS- The increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary.

‘(e) SPECIAL RULES- For purposes of this section--

‘(1) AGGREGATION RULES- All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer.

‘(2) PASS-THRU IN THE CASE OF ESTATES AND TRUSTS- Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.

‘(3) PARTNERSHIPS- In the case of partnerships, the credit under this section shall be determined at the partnership level and allocated among the partners under regulations prescribed by the Secretary; except that--

‘(A) subsection (b) shall be applied at the partner level, and

‘(B) the employees of the partnership and of each partner shall be treated as employees of the taxpayer for purposes of applying subsection (c)(2)(B)(iii).

‘(f) NO DOUBLE BENEFIT-

‘(1) REDUCTION IN BASIS- For purposes of this subtitle--

‘(A) IN GENERAL- If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined.

‘(B) CERTAIN DISPOSITIONS- If during any taxable year there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph (A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term ‘recapture amount’ means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d).

‘(2) OTHER DEDUCTIONS AND CREDITS- No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section.’

(b) Conforming Amendments-

(1) Section 38(b) of such Code is amended--

(A) by striking ‘plus’ at the end of paragraph (11),

(B) by striking the period at the end of paragraph (12), and inserting a comma and ‘plus’, and

(2) Subsection (d) of section 39 of such Code (relating to carryback and carryforward of unused credits) is amended by adding at the end the following new paragraph:

‘(9) NO CARRYBACK OF SECTION 45D CREDIT BEFORE JANUARY 1, 1999- No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45D may be carried back to a taxable year beginning before January 1, 1999.’.

(3) The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

‘Sec. 45D. Employer-provided child care credit.’.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1998.

(a) IN GENERAL- Subsection (a) of section 26 of the Internal Revenue Code of 1986 is amended by inserting ‘(other than the credit allowed by section 21)’ after ‘credits allowed by this subpart’.

(b) CONFORMING AMENDMENT- Section 21 of such Code is amended by adding at the end the following new subsection:

‘(f) LIMITATION BASED ON AMOUNT OF TAX- The aggregate credit allowed by this section for the taxable year shall not exceed the sum of--

‘(1) the taxpayer’s regular tax liability for the taxable year reduced by the sum of the credits allowed by this subpart other than this section, plus

‘(2) the tax imposed by section 55 for such taxable year.’

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1998.

TITLE III--GRANTS TO BUSINESS CONSORTIA

Subtitle A--Grant Program

SEC. 301. AUTHORITY TO MAKE GRANTS.

(a) IN GENERAL- The Secretary shall make grants to States to be used to provide grants to eligible entities described in subsection (b) to assist such entities to improve access to affordable, local, quality child care services.

(b) ELIGIBLE ENTITIES DESCRIBED-

(1) IN GENERAL- An eligible entity described in this subsection is a consortium that--

(A) shall consist of representatives from not fewer than 5 businesses (or a nonprofit organization that represents not fewer than 5 businesses); and

(B) has not received a grant under this title.

(2) ADDITIONAL REQUIREMENT- To the maximum extent practicable, each business or organization that forms an eligible entity under paragraph (1) shall be located in the same geographical region of the United States.

(c) PRIORITY FOR SMALL BUSINESSES- In providing grants under subsection (a), a State shall give priority to eligible entities that consist of a majority of representatives from small businesses.

(d) MAXIMUM AMOUNT OF GRANT- The amount of a grant provided to an eligible entity under subsection (a) may not exceed $50,000 for any fiscal year.

SEC. 302. APPLICATION.

The Secretary may not provide a grant under section 301 to an eligible entity unless such entity submits to the Secretary an application that contains--

(1) a proposal to use such grant to provide quality child care services; and

(2) such information as the Secretary may reasonably require by rule.

SEC. 303. USE OF AMOUNTS.

(a) IN GENERAL- The Secretary may not provide a grant under section 301 to an eligible entity unless such entity agrees to use such grant to initiate a quality, affordable, local child care program that carries out the proposal included in the application submitted under section 302 by such entity.

(b) CONDUCT OF PROGRAM- In carrying out the program described in subsection (a), the eligible entity may--

(1) establish a board of directors to oversee the program; and

(2) provide child care services on a sliding fee scale that provides for cost sharing by the families of the children who receive such services.

(c) ADMINISTRATIVE COSTS- The eligible entity may use not more than 15 percent of the amount of a grant to pay for administrative costs associated with the program described in subsection (a).

SEC. 304. REQUIREMENT OF MATCHING FUNDS.

The Secretary may not provide a grant under section 301 to an eligible entity unless such entity agrees that--

(1) it will make available non-Federal contributions toward the costs of carrying out a program under section 303 in an amount that is not less than $1 for each $1 of Federal funds provided under a grant under section 301; and

(2) of such non-Federal contributions, not less than $1 of each such $2 shall be from businesses participating in the eligible entity.

Subtitle B--General Provisions

SEC. 351. DEFINITIONS.

For purposes of this title:

(1) SECRETARY- The term ‘Secretary’ means the Secretary of Health and Human Services.

(2) STATE- The term ‘State’ has the meaning given such term in section 658P of the of the

Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858n).

SEC. 352. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated $75,000,000 for each of the fiscal years 1999, 2000, 2001, 2002, and 2003 to carry out this title.

TITLE IV--AFTER SCHOOL PROGRAM

Subtitle A--21st Century Community Learning Centers

SEC. 401. PROGRAM AUTHORIZATION.

Section 10903 of the 21st Century Community Learning Centers Act (referred to in this subtitle as ‘the Act’) is amended--

(1) subsection (a)--

(A) by inserting ‘(1) GRANTS TO LEAS.’ after ‘SECRETARY- ’;

(B) in paragraph (1), as so designated--

(i) by striking ‘rural and inner-city’ and all that follows through ‘or to’ and inserting the following: ‘local educational agencies, on behalf of public elementary or secondary schools, including middle schools, that serve communities with a substantial need for expanded learning opportunities, to enable them to establish or’; and

(ii) by striking ‘a rural or inner-city community’ and inserting ‘those communities’; and

(C) by adding after paragraph (1), as redesignated, a new paragraph (2) to read as follows:

‘(2) GRANTS TO CBOS- The Secretary may reserve not more than 10 percent of the funds appropriated to carry out this part for any fiscal year to make grants to community-based organizations to carry out projects, consistent with the purpose of this part, with the concurrence of the local educational agencies in their respective communities.’;

(2) in subsection (b)--

(A) by striking ‘States, among’ and inserting ‘States and among’; and

(B) by striking ‘United States,’ and all that follows through ‘a State’ and inserting ‘United States’; and

(3) in subsection (c), by striking ‘3’ and inserting ‘5’.

SEC. 402. APPLICATIONS.

Section 10904(a) of the Act is amended--

(1) in the first sentence, by striking ‘an elementary or secondary school or consortium’ and inserting ‘a local educational agency, on behalf of one or more elementary or secondary schools,’;

(2) in paragraph (1), by striking ‘or consortium’;

(3) in paragraph (2), by striking ‘and’ after the semicolon;

(4) in paragraph (3)--

(A) in subparagraph (D), by striking ‘or consortium’; and

(B) in subparagraph (E)--

(i) by striking ‘or consortium’; and

(ii) in clause (ii), by striking the period at the end and inserting a semicolon; and

(5) by adding at the end the following:

‘(4) information demonstrating that the applicant will--

‘(A) provide not less than 1/2 the annual cost of project activities from sources other than funds under this part, which may be provided in cash or in kind, fairly evaluated, provided that not more than 50 percent of the applicant’s contribution may come from funds provided by the Secretary under other programs that permit the use of those funds for those activities, if the applicant determines, in good faith, that it cannot otherwise meet the requirement of this subparagraph; and

‘(B) in the 4th and 5th years of its project, increase the percentage of the project’s cost that is paid for by funds other than those received under this part; and

‘(5) an assurance that the applicant will, in each year of the project, maintain its fiscal effort, from non-Federal sources, from the preceding fiscal year for the services it provides with its grant under this part.’.

SEC. 403. USES OF FUNDS.

Section 10905 of the Act is amended by striking ‘may be used’ and all that follows through ‘four’ and inserting the following: ‘shall be used to establish or expand community learning centers that provide activities that offer significant expanded learning opportunities, such as before and after school, for children and youth in the community and that also may include any’.

SEC. 404. DEFINITION.

Section 10906(1) of the Act is amended to read as follows:

‘(1) provides extended learning services and that may provide services that address other health, social services, cultural, and recreational needs of the community; and;’.

SEC. 405. CONTINUATION AWARDS UNDER CURRENT STATUTE.

The Act is further amended--

(1) in section 10907, by striking ‘appropriated’ and all that follows to the end and inserting the following: ‘appropriated $200,000,000 for each of fiscal years 1999 through 2003.’; and

(2) by adding after section 10907 a new section 10908 to read as follows:

‘SEC. 10908. CONTINUATION AWARDS.

‘Notwithstanding any other provision of law, the Secretary may use funds appropriated under this part to make continuation awards for projects that were funded under this part with fiscal year 1998 funds, under the terms and conditions that applied to the original awards for those projects.’.

SEC. 406. EFFECTIVE DATE.

This subtitle, and the amendments made by this subtitle, shall take effect on October 1, 1998.

Subtitle B--After School Snacks

(a) PARTICIPATION BY CERTAIN ADDITIONAL INSTITUTIONS UNDER THE CHILD AND ADULT CARE FOOD PROGRAM- Section 17 of the National School Lunch Act (42 U.S.C. 1766) is amended by adding at the end the following:

‘(q) PARTICIPATION BY CERTAIN ADDITIONAL INSTITUTIONS UNDER THE PROGRAM-

‘(1) IN GENERAL- Subject to the conditions in this subsection, institutions that provide care to school children during after-school hours, weekends, or holidays during the regular school year may participate in the program authorized under this section. Unless otherwise specified in this subsection, all other provisions of this section shall apply to these institutions.

‘(2) ELIGIBLE CHILDREN- Reimbursement may be provided under this subsection only for supplements served to children who are not more than 18 years of age.

‘(3) SUPPLEMENT REIMBURSEMENT-

‘(A) LIMITATION- Only supplements served to eligible school children during after-school hours, weekends, or holidays during the regular school year may be claimed for reimbursement. Institutions may claim reimbursement for only one supplement per child per day.

‘(B) RATE- Eligible supplements shall be reimbursed at the rate for free supplements under subsection (c)(3).

‘(C) NO CHARGE- All supplements claimed for reimbursement shall be served without charge.’.

(b) CHANGES TO ELIGIBILITY REQUIREMENTS FOR MEAL SUPPLEMENTS FOR CHILDREN IN AFTERSCHOOL CARE- Section 17A of such Act (42 U.S.C. 1766a) is amended--

(1) in subsection (a)(2)--

(A) in subparagraph (A), by adding ‘and’ at the end;

(B) in subparagraph (B), by striking ‘; and’ and inserting a period; and

(C) by striking subparagraph (C);

(2) by striking subsection (b); and

(3) by redesignating subsections (c) and (d) as subsections (b) and (c), respectively.

Subtitle C--After-School Prevention Programs

SEC. 421. AUTHORIZED ACTIVITIES.

The provisions of part R of title I of the Omnibus Crime Control and Safe Streets Act of 1968, as set forth in the amendment under section 302(a) of H.R. 3, as passed by the House on May 8, 1997, and in effect for purposes of title I (under the heading ‘Violent Crime Reduction Programs, State and Local Law Enforcement Assistance) of the Departments of Commerce, Justice, and State Appropriations Act, 1998 (Public Law 105-119), shall apply for purposes of such Appropriations Act as if the following amendments were made to such provisions:

(1) In section 1801(b) by striking ‘amounts’ and inserting the following: ‘Fifty percent of the amount’.

(2) By adding at the end of section 1801 the following:

‘(c) PREVENTION- 50 percent of the amount paid to a State, unit of local government, or an eligible unit under this part shall be used by the State, unit of local government, or eligible unit for the purpose of improving prevention programs in juvenile justice system. The programs must include all of the following:

‘(1) Operating after-school programs with high priority given to programs designed and operated by law enforcement personnel, such as police athletic leagues.

‘(2) Targeting high-crime neighborhood and at-risk juveniles.

‘(3) Providing educational or recreational activities designed to encourage law-abiding conduct, reduce the incidence of criminal activity, or teach juveniles alternatives to crime.

‘(4) Coordinating with State or local juvenile crime control and juvenile offender accountability programs.’.

TITLE V--MODEL STATES EARLY LEARNING PROGRAM

SEC. 501. MODEL STATES EARLY LEARNING PROGRAM.

(a) FUNDING- Section 418 of the Social Security Act (42 U.S.C. 618), as amended by section 101 of this Act, is amended--

(1) by redesignating subsections (c), (d), and (e) as subsections (d), (e), and (f), respectively; and

(2) by inserting after subsection (b) the following:

‘(c) APPROPRIATIONS FOR MODEL STATES EARLY LEARNING PROGRAM-

‘(1) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated $600,000,000 for each of fiscal years 1999 through 2003 for carrying out activities related to early learning programs in accordance with section 658T of the CCDBG Act.

‘(2) RESERVATION AND ALLOTMENT OF FUNDS-

‘(A) INDIAN TRIBES- The Secretary shall reserve 2 percent of the total amount appropriated pursuant to paragraph (1) of this subsection for each fiscal year for payments to Indian tribes. From the amount so reserved for a fiscal year, the Secretary shall allot to an Indian tribe for the fiscal year an amount that bears the same proportion to the amount so reserved as the proportion of funds provided to the Indian tribe under section 658O(c) of the CCDBG Act for the fiscal year bears to the total amount paid to all Indian tribes under such section for the fiscal year.

‘(B) TERRITORIES- The Secretary shall reserve 1/2 of 1 percent of the total amount appropriated pursuant to paragraph (1) of this subsection for any fiscal year for payments to the territories. From the amount so reserved for a fiscal year, the Secretary shall allot to a territory for the fiscal year an amount that bears the same ratio to the amount so reserved as the amount provided to the territory under the CCDBG Act for fiscal year 1997 bears to the total amount provided to all territories under such Act for fiscal year 1997.

‘(C) TECHNICAL ASSISTANCE FOR, AND EVALUATION OF, EARLY LEARNING PROGRAMS- From all amounts appropriated pursuant to paragraph (1) of this subsection, the Secretary shall reserve an aggregate of $6,000,000, which shall be available only for costs of providing technical assistance to, and conducting national evaluations of, State, local, and tribal early learning programs under section 658T of the CCDBG Act.

‘(D) STATES- The Secretary shall allot the total amount appropriated for a fiscal year pursuant to paragraph (1) of this subsection that remains after applying subparagraphs (A), (B), and (C) of this paragraph for the fiscal year, among the Model States pursuant to the formula used for determining the amount to be allotted to the State under section 658O of the CCDBG Act.

‘(3) MATCHING PAYMENTS TO STATES AND TERRITORIES-

‘(A) IN GENERAL- The Secretary shall pay to each State and each territory that is a Model State for a fiscal year an amount equal to the lesser of--

‘(i) the amount allotted to the State or territory under paragraph (2) of this subsection; or

‘(ii) 80 percent of expenditures by the State or territory for an early learning program under a plan approved under section 658T of the CCDBG Act.

‘(B) REDISTRIBUTION- Subsection (a)(2)(D) shall apply to amounts allotted to States under this subsection.

‘(4) PAYMENTS TO INDIAN TRIBES- The Secretary shall pay to each Indian tribe for a fiscal year an amount equal to the lesser of--

‘(A) the amount allotted to the Indian tribe under paragraph (2)(A) of this subsection; or

‘(B) the total amount of expenditures by the tribe for an early learning program under section 658T of the CCDBG Act.

‘(5) MODEL STATE- In this subsection, the term ‘Model State’ means a State that has in effect under its plan under section 658E of the CCDBG Act an early learning program plan meeting the requirements specified in section 658T(b)(2) of such Act.’.

(b) ESTABLISHMENT OF MODEL STATES EARLY LEARNING PROGRAM-

(1) STATE PLAN REQUIREMENT- Section 658E(c) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)) is amended by adding at the end the following:

‘(6) MODEL STATES EARLY LEARNING PROGRAM PLAN REQUIREMENTS- In the case of a State electing to implement an early learning program under section 658T, the State plan shall meet the requirements specified in section 658T(b)(2).’.

(2) MODEL STATES EARLY LEARNING PROGRAM- The Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) is amended by adding at the end the following:

‘SEC. 658T. MODEL STATES EARLY LEARNING PROGRAM.

‘(a) PROGRAM PURPOSE- The purpose of the program under this section is to enable States, through grants to communities, to support activities that promote children’s healthy development during the earliest years of life and improve the quality of child care for children aged five and under, including those with disabilities.

‘(b) REQUIREMENTS FOR STATE PARTICIPATION-

‘(1) IN GENERAL- In order to be eligible for Federal matching funds under section 418(c) of the Social Security Act, the State shall have in effect under its plan under section 658E an early learning program plan meeting the requirements specified in paragraph (2).

‘(2) MODEL STATES EARLY LEARNING PROGRAM PLAN REQUIREMENTS- The model states early learning program plan shall meet the following requirements:

‘(A) LEAD AGENCY- The plan shall provide that the program will be administered by the lead agency designated under 658D.

‘(B) CERTIFICATION- The plan shall include a certification that--

‘(i) there is in effect in such State, and that the State maintains a mechanism to enforce, a requirement that each center-based child care provider, and each group home child care provider, in such State obtain from such State, or from an entity of local government designated by such State, a preemployment criminal background check of each individual subsequently employed by such provider to provide child care services,

‘(ii) there is in effect in such State, and that such State enforces, a requirement that an entity of State or local government periodically inspect center-based child care providers, group home child care providers,family child care providers, and all other child care providers for compliance with the health and safety requirements applicable to such providers under State law.

‘(iii) there is in effect in such State, and that such State enforces, a requirement that all caregivers who provide child care services for which assistance is provided under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), receive training in providing medical first aid.

‘(iv) there is in effect in such State, and that such State enforces, a requirement that caregivers who are, or are employed by, child care providers who provide child care services for compensation have specific minimum training as determined and provided by the lead agency.

‘(v) there is in effect in such State, and that such State enforces, a requirement that all child care providers in such State who provide child care services for compensation obtain from the parents (or legal guardians) of the children who receive such services information regarding whether such children have received age-appropriate immunizations in accordance with the then current immunization recommendations issued by the Centers for Disease Control and Prevention.

‘(vi) there is in effect in such State, and that such State enforces, a requirement that specifies developmentally appropriate child-per-caregiver ratios applicable to center-based child care providers in such State.

‘(vii) such State complies with section 58E(c)(4)(A) of the Child Care and Development Block Grant Act (42 U.S.C. 9858c(c)(4)(A)).

‘(C) ASSURANCES- The plan shall include an assurance that--

‘(i) such State will comply with the requirements of this subtitle applicable with respect to such grant.

‘(ii) the State will not reduce or remove any requirement applicable to child care providers, that exceeds any requirement applicable under this title.

‘(D) COMMUNITY GRANT PROCEDURES- The plan shall describe the standards and procedures to be applied in the review and approval of community applications, and in setting amounts, terms, and conditions of community grants, including the methods to be used to ensure that no less than 70 percent of grant funds are awarded to low-income communities.

‘(E) COMMUNITY PARTICIPATION IN PLANNING AND MONITORING- The plan shall describe the methods to be used to ensure participation, in planning and monitoring activities under the community plan, of representatives of concerned elements of the community, including parents of young children, child care providers, child development professionals, early intervention specialists, health care providers, public school representatives, local interagency coordinating councils for children with disabilities, local government, and business leaders.

‘(F) PROGRAM ACTIVITIES- The plan shall specify which of the allowable activities enumerated in subsection (c) may be carried out under community grants under the plan.

‘(G) PERFORMANCE GOALS AND MEASURES- The plan shall specify--

‘(i) performance goals to be achieved and the performance measures to be used to assess progress toward such goals under the plan, which--

‘(I) shall be developed pursuant to guidance provided by the Secretary and in consultation with local government authorities in accordance with section 658D(b)(2); and

‘(II) shall be designed to improve child development through coordination with health care services; enhanced early learning environments; parental involvement; consumer education; and increased rates of accreditation by nationally recognized accreditation organizations;

‘(ii) interim benchmarks and interim and long term timetables, as appropriate, for achieving each goal; and

‘(iii) the steps to be taken by the State or grantees in accordance with guidance provided by the Secretary if the specified benchmarks are not achieved.

‘(H) COORDINATION WITH ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE- The State plan shall specify the methods to be used to coordinate activities under this section and section 658G(a), including coordination of planning and of performance goals and measures, in order to maximize the effectiveness of both programs.

‘(c) ALLOWABLE ACTIVITIES- A model states early learning program under a State plan under this section may provide for any or all of the following activities:

‘(1) INFORMATION AND RESOURCES-

‘(A) PARENTING EDUCATION- Provision of parenting education, including use of or collaboration with Even Start or similar programs, for parents of young children by means including use of community-based resource centers, family literacy programs with parenting education components, collaboration with early intervention and preschool providers of services for children, public elementary schools, centers that serve children with special health care needs or disabilities and their families, and home visiting programs.

‘(B) INFORMATION AND REFERRAL- Initiatives to develop or increase the availability of consumer education information and referral services and other resources to assist parents to locate and assess the quality of available child care services.

‘(C) FAMILY CHILD CARE NETWORKS- Development of support networks, information and referral services, and other supportive services addressing needs of family child care providers for access to such resources as education, training, and community support services.

‘(2) QUALITY AND AVAILABILITY-

‘(A) PROVIDER TRAINING- Training of child care personnel, which may include training in early childhood development, early literacy, health, nutrition, hygiene, first-aid and safety, best practices for serving children with disabilities in child care, and other appropriate matters.

‘(B) IMPROVED STAFFING RATIOS- Initiatives to increase ratios of child care staff to children in care and to reduce child care group sizes.

‘(C) LICENSING AND ACCREDITATION ASSISTANCE- Assistance to entities and individuals in meeting applicable child care accreditation and licensing requirements and in obtaining licensing or accreditation.

‘(D) HEALTH SERVICES- Improving coordination of child care with appropriate health services including health and mental health consultations, hearing and vision testing, and immunizations, by methods such as co-location of health and child care services, referrals of children in child care to health care providers or screening services, and transfer of child health records to public school at school entry. Services under this subparagraph shall not include direct provision of or payment for health care services.

‘(E) CARE FOR CHILDREN WITH SPECIAL NEEDS- Increasing the availability and quality of child care for young children with special health care needs, developmental delays, and disabilities; and coordinating with early intervention and preschool special education services.

‘(F) SALARY AND BENEFIT ENHANCEMENT- Assistance to child care programs to increase the quality and continuity of care by retaining highly qualified child care staff working directly with children through enhanced compensation.

‘(G) MONITORING AND TECHNICAL ASSISTANCE- Technical assistance to grantees, and monitoring of programs, assisted under this section. State expenditures under this subparagraph shall not exceed a percentage of total State expenditures for the program under this section equal to 10 percent for each of fiscal years 1999 through 2001, and 5 percent for fiscal year 2002 and each succeeding fiscal year.

‘(I) SMALL GRANT PROGRAM- Funding in the aggregate amount of $1,000,000 or 5 percent of such State’s allotment, whichever is less, may be used to make small grants to persons on a competitive basis, established by the Secretary by rule, to be used for improvments and startup costs (as defined by the Secretary by rule) incurred to become eligible childcare providers.’.

(2) by striking the period at the end of subparagraph (E) and inserting a semicolon; and

(3) by inserting after and below subparagraph (E) the following subparagraph:

‘(F) the model states early learning program under section 658T, including--

‘(i) the number and average dollar amount of grants awarded;

‘(ii) the number, average dollar amount, and percentage of the total State award of such grants made to low-income communities;

‘(iii) the number of early learning programs;

‘(iv) the number of children served with special health care needs, disabilities or developmental delays;

‘(v) the number of early learning programs that assist children with special needs;

‘(vi) progress toward achievement of each performance goal, for each specific, quantifiable and measurable objective;

‘(vii) expenditures for each allowable activity listed in section 658T(c), total expenditures and, to the extent feasible, the volume or frequency of such activity and the average expenditure per unit of such activity; and

‘(viii) with respect to any allowable activity listed in section 658T(c) for which expenditures are made by the State both under section 658G(a) and under section 658T, the amount expended under each such section; and

‘(ix) such other data as the Secretary may require;.’.

TITLE VI--STANDARDS ENFORCEMENT PROGRAM

SEC. 601. CHILD CARE STANDARDS ENFORCEMENT PROGRAM.

(a) ESTABLISHMENT OF PROGRAM- Section 658G of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858e) is amended--

(1) by inserting ‘(a) CONSUMER EDUCATION- ’ before ‘A’; and

(2) by adding at the end the following:

‘(b) CHILD CARE STANDARDS ENFORCEMENT-

‘(1) STATE PLAN REQUIREMENT- In order to be eligible for funds under section 658J(a)(2), a State shall include in its plan under section 658E a child care standards enforcement plan, with the following elements:

‘(A) ASSESSMENT OF CURRENT ENFORCEMENT PROGRAM- An assessment of state enforcement programs in effect in fiscal year 1998 (or, if later, the base year as defined in section 658B(b)(2)(E)(i)) by provider type, including number of inspections, percentage of providers inspected, and scope of inspection.

‘(B) GOALS AND MEASURES FOR IMPROVING ENFORCEMENT PROGRAMS- A statement of goals to be achieved with respect to increasing the number of annual inspections, expansion of the scope or improvement of the quality of inspections, or a combination thereof, and performance measures to be used to assess progress toward such goals by provider type.

‘(C) ENFORCEMENT IMPROVEMENT ACTIVITIES- A description of the activities to be carried out with funds allotted to the State from amounts appropriated under section 658B(b), which may include--

‘(i) initiatives to increase numbers of qualified staff engaged in licensing of child care providers and enforcement of licensing, health, safety, and other applicable standards;

‘(iii) development, and dissemination to the public, of information on health, safety and licensing violations, by provider; and

‘(iv) other activities designed to ensure provider compliance with applicable standards including coordination with section 658T(c)(2) activities under the early learning program such as licensing, accreditation, and monitoring of and technical assistance to grantees.

‘(2) SUPPLEMENTATION OF OTHER FUNDING- The State plan described in paragraph (1) shall contain assurances that Federal funds provided to the State under this subsection will not be used to supplant Federal or non-Federal funds for existing services and activities that promote the purposes of this subsection.’.

(b) AUTHORIZATION OF APPROPRIATIONS- Section 658B of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858) is amended--

(1) by inserting ‘(a) IN GENERAL- ’ before ‘There’; and

(2) by adding at the end the following:

‘(b) CHILD CARE STANDARDS ENFORCEMENT-

‘(1) APPROPRIATION- There is authorized to be appropriated to carry out section 658G(b) $100,000,000 for each of fiscal years 1999 through 2003.

‘(2) ALLOCATION OF APPROPRIATIONS- Amounts appropriated for each fiscal year pursuant to paragraph (1) shall be allocated among States (as defined in section 658O) as follows:

‘(A) BASIC GRANT- The Secretary shall allocate to States, in accordance with the formula set forth in section 658O--

‘(i) the amount appropriated under this section for fiscal year 1999, and

‘(ii) the first $75,000,000 of such appropriations (or, if less, the total amount appropriated) for each of fiscal years 2000, 2001, and 2002.

‘(B) SUPPLEMENT TO ACHIEVE $1 MILLION GRANT- From the amount (if any) remaining after application of subparagraph (A), the Secretary shall allocate to each State that received an allocation of less than $1,000,000 under subparagraph (A) the lesser of--

‘(i) the difference between such allocation and $1,000,000, or

‘(ii) an amount bearing the same ratio to the amount remaining for allocation under this subparagraph as the difference determined for such State under clause (i) bears to the sum of such differences, as so determined, for all States described in this subparagraph.

‘(C) PERFORMANCE BONUSES-

‘(i) IN GENERAL- From the amount (if any) of the appropriation under paragraph (1) for each fiscal year remaining after application of subparagraphs (A) and (B), the Secretary shall allocate in accordance with the formula set forth in section 658O, to each State that has achieved in the preceding fiscal year either the inspection rate or the inspection change percentage specified in clause (ii) the lesser of--

‘(I) 20 percent of the State’s allocation under subparagraph (A); or

‘(II) an amount bearing the same ratio to the amount available for allocation under this subparagraph as the amount determined for such State under subclause (I) bears to the sum of such amounts, as so determined, for all States described in this subparagraph.

‘(ii) PERFORMANCE TARGETS- For purposes of clause (i)--

‘(I) the inspection rate shall be not less than 75 percent for fiscal year 1999, 85 percent for fiscal year 2000, and 95 percent for fiscal year 2001; and

‘(II) the inspection change percentage shall be not less than 110 for fiscal year 1999, 115 for fiscal year 2000, and 125 for fiscal year 2001.

‘(D) REMAINDER- Amounts not allocated under subparagraphs (A), (B), and (C) shall remain available for allocation for the succeeding fiscal year in accordance with this subsection.

‘(E) DEFINITIONS- For the purposes of this paragraph the follow definitions apply--

‘(i) ‘base year’, with respect to a State, means the fiscal year preceding the first fiscal year for which the State seeks funding under section 658J(a)(2);

‘(ii) ‘inspection change percentage’ means, with respect to a fiscal year, the ratio of the number of child care facilities and providers in a State that were inspected in such fiscal year to the number of such facilities and providers that were inspected in the base year expressed as a percentage; and

‘(iii) ‘inspection rate’ means the ratio of the number of child care facilities or providers receiving at least one inspection during a fiscal year to the total number of facilities or providers in operation in the State during that fiscal year.’.

(c) PAYMENTS- Section 658J(a) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858h(a)) is amended--

(1) by striking ‘(a) IN GENERAL- Subject to the availability of appropriations’ and inserting the following:

‘(a) BASIC GRANT- A State--

‘(1) IN GENERAL- ’; and

(2) by adding at the end the following:

‘(2) CHILD CARE STANDARDS ENFORCEMENT PROGRAM- A State described in paragraph (1) whose plan under section 658E provides for child care standards enforcement under section 658G(b) shall be entitled to payment under this section in an amount equal to the lesser of its expenditures or allotment for such purpose under section 658O.’.

(d) ANNUAL REPORT- Section 658K(a)(2) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858(i)(A)(2)), as amended by section 501(c), is amended by inserting after subparagraph (F) the following:

‘(G) enforcement of child care quality and safety standards, including data, by type of provider, on--

‘(i) the number and percentage of facilities or providers inspected (and the number and percentage of facilities or providers receiving more than one inspection) and a comparison to the prior year’s inspection rate;

‘(ii) the numbers and types of deficiencies identified (and the numbers of serious deficiencies presenting risks to health or safety);

‘(iii) the number of deficiencies remedied upon subsequent inspection, by type of deficiency; and

‘(iv) such other data as the Secretary may require; and.’.

TITLE VII--CHILD CARE PROVIDER SCHOLARSHIP PROGRAM

SEC. 701. NATIONAL CHILD CARE PROVIDER SCHOLARSHIP PROGRAM.

(a) ESTABLISHMENT OF PROGRAM- Section 658G of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858e), as amended by section 601(a), is amended by adding at the end the following:

‘(c) CHILD CARE PROVIDER SCHOLARSHIP PROGRAM-

‘(1) STATE PLAN REQUIREMENT- In order to be eligible for funds under section 658J(a)(3), a State shall include in its plan under section 658E a child care provider scholarship program plan, meeting the requirements of this subsection, designed to further the goals of child care provider recruitment, training, credentialing, and retention.

‘(2) ELIGIBILITY CRITERIA FOR SCHOLARSHIP APPLICANTS- The State plan shall provide that, in order for an individual to be eligible for a scholarship grant under this subsection, the following requirements shall be met:

‘(A) DEMONSTRATED COMMITMENT TO CHILD CARE CAREER- The individual--

‘(i) must be a child care worker who is (or is employed by) a licensed or registered child care provider, or has a commitment for employment from a licensed or registered child care provider; and

‘(ii) must agree in writing to continue to be employed in the field of child care for at least one year after receiving the training for which assistance is provided.

‘(B) COST SHARING BY APPLICANT-

‘(i) IN GENERAL- The individual (either as provided in clause (ii) or otherwise) will provide funds for payment of a share of the cost of the education or training.

‘(ii) APPLICATION FOR PELL GRANTS- In the case of an application for a scholarship intended for use in an educational institution participating in the Pell Grant program under title IV of the Higher Education Act, the individual shall apply for a grant under such program for which the individual is eligible.

‘(C) EMPLOYER REQUIREMENTS- In the case of an individual employed by (or who has a commitment for employment from) a licensed or registered child care provider--

‘(i) COST SHARING- The individual’s employer must pay a share of the cost of the education or training.

‘(ii) EMPLOYMENT AND REMUNERATION- The individual’s employer must agree to provide increased financial incentives to the individual, such as a salary increase or bonus, when the individual completes the education or training.

‘(3) QUALIFYING EDUCATIONAL INSTITUTIONS- The State plan shall specify the types of educational and training programs for which scholarships granted under the State program may be used, which shall be limited to (but may include any or all) programs that--

‘(A) are administered by institutions of higher education that are eligible to participate in student financial assistance programs under title IV of the Higher Education Act of 1965; and

‘(B) that lead to a State or national credential in child care or early childhood or early childhood special education, or to an associate or bachelor’s degree in child development or early childhood education.

‘(4) ANNUAL MAXIMUM SCHOLARSHIP GRANT AMOUNT- The maximum amount of a scholarship awarded to an eligible individual under this section shall not exceed $1,500 per year.

‘(5) SUPPLEMENTATION OF OTHER FUNDING- The State plan shall contain assurances that Federal funds provided to the State under this subsection will not be used to supplant Federal or non-Federal funds for existing services and activities that promote the purposes of this subsection.’.

(b) AUTHORIZATION OF APPROPRIATIONS- Section 658B of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858), as amended by section 601(b), is amended by adding at the end the following:

‘(c) CHILD CARE PROVIDER SCHOLARSHIP PROGRAM- There is authorized to be appropriated to carry out section 658G(c) $50,000,000 for each of fiscal years 1999 through 2003.’.

(c) ALLOTMENT- Section 658O of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858m) is amended--

(d) PAYMENTS- Section 658J(a) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858h), as amended by section 601(c), is amended by adding at the end the following:

‘(3) CHILD CARE SCHOLARSHIP PROGRAM- A State described in paragraph (1) whose plan under section 658E provides for a child care scholarship program under section 658G(c) shall be entitled to payment under this section in an amount equal to the lesser of its allotment under section 658O or 80 percent of expenditures by the State for such program.’.

(e) ANNUAL REPORT- Section 658K(a)(2) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858i), as amended by section 601(d), is amended by inserting after subparagraph (G) the following:

‘(H) the child care scholarship program, including--

‘(i) the number of child care workers receiving scholarship grants;

‘(ii) the amount of each scholarship grant;

‘(iii) the number of course credits or credentials completed by individuals receiving scholarships;

‘(iv) the number and percentage of child care workers receiving scholarship grants in the previous year who fulfilled their one-year commitment; and

‘(v) such other data as the Secretary may require.’

TITLE VIII--RESEARCH AND DEMONSTRATION PROGRAM

SEC. 801. RESEARCH AND DEMONSTRATIONS.

(a) ESTABLISHMENT OF RESEARCH AND DEMONSTRATION ACTIVITIES- The Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) is amended by adding at the end the following:

‘SEC. 658U. RESEARCH AND DEMONSTRATIONS.

‘(a) IN GENERAL- The Secretary is authorized, either directly or through grants, contracts, cooperative agreements, or other arrangements, to carry out research, demonstration projects, and other activities relating to child care, including activities designed to improve the quality and increase the availability of child care. Such activities shall be coordinated with activities under the Department of Education’s Office of Educational Research and Improvement.

‘(b) ALLOWABLE ACTIVITIES- Activities under this section may include the following:

‘(1) RESEARCH ON CHILD CARE NEEDS OF LOW-INCOME FAMILIES- Research designed to identify and overcome barriers restricting availability, affordability, and quality of child care for low-income families.

‘(2) RESEARCH ON GOOD POLICIES AND PRACTICES- Research designed to identify good child care policies and practices, including the types of child care settings, parent activities, and provider training that most benefit the early development of children.

‘(3) RESEARCH ON RETENTION OF CHILD CARE PROVIDER STAFF- Research on factors affecting retention of child care provider staff, including the National Child Care Provider Scholarship Program under section 658G(b) and its subsequent effect on outcomes for children.

‘(4) DEMONSTRATIONS OF TECHNOLOGY-BASED EDUCATION AND TRAINING- Demonstration projects testing use of remote site and interactive computer technology to provide education and training to child care providers and parents.

‘(5) DEMONSTRATION PROJECTS FOR NEW METHODS- Demonstration projects addressing ways to assist parents, such as parents who choose to stay at home with their children and parents with particular child care needs, including parents of children with special health care needs or disabilities, homeless families, migrant families, teen parents and foster parents.

‘(6) NATIONAL CENTER ON CHILD CARE STATISTICS- Establishment and operation of a National Center on Child Care Statistics for the collection and dissemination of data and information on child care.

‘(7) HOTLINE AND CONSUMER EDUCATION- Establishment and operation of a hotline to assist parents to locate their local child care resource and referral agency and public education activities to assist parents in becoming informed consumers of quality child care.

‘(c) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $30,000,000 for each of fiscal years 1999 through 2003.’.

(b) REPORT TO CONGRESS- Section 658L of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858j) is amended by inserting ‘and progress on development of research and demonstration projects as carried out under section 658U’ after ‘under section 658K’.

TITLE IX--MISCELLANEOUS

Subtitle A--Child and Adult Food Program

SEC. 901. REVISION OF REIMBURSEMENT RATES FOR FAMILY OR GROUP DAY CARE HOMES UNDER THE CHILD AND ADULT CARE FOOD PROGRAM UNDER THE NATIONAL SCHOOL LUNCH ACT.

Section 17(f)(3) of the National School Lunch Act (42 U.S.C. 1766(f)(3)) is amended--

(1) in subparagraph (A)(iii)(I)--

(A) in division (aa), by striking ‘95 cents for lunches and suppers, 27 cents for breakfasts, and 13 cents for supplements’ and inserting ‘$1.03 for lunches and suppers, 38 cents for breakfasts, and 18 cents for supplements’; and

(B) in division (bb), by striking ‘1997’ and inserting ‘1998’; and

(2) in the second sentence of subparagraph (B), by inserting after ‘Such levels’ the following: ‘shall be those levels in effect on June 30, 1998, increased by $2.00 per home and’.

Subtitle B--Mortgage Insurance for Child Care and Development Facilities

SEC. 951. SHORT TITLE.

This subtitle may be cited as the ‘Children’s Development Commission Act’.

SEC. 952. CONGRESSIONAL FINDINGS.

The Congress finds the following:

(1) The need for quality nursery schools, both full-time and part-time child care centers and after-school programs, after school programs, neighborhood-run mothers-day-out programs, and family child care providers has grown among working parents, and parents who stay at home, who want their children to have access to early childhood education.

(2) All parents should have access to safe, stimulating, and educational early childhood education programs for their children, whether such programs are carried out in a child care center, a part-time nursery school (including a nursery school operated by a religious organization), or a certified child care provider’s home.

(3) The number of available enrollment opportunities for children to receive quality child care services is not meeting the demand for such services.

(4) In 1995 there were about 21,000,000 children less than 6 years of age, of whom 31 percent were participating in center-based child care services and 14 percent were receiving child care in homes. Between 1992 and 2005 the participation of women 24 to 54 years of age in the labor force is projected to increase from 75 percent to 83 percent.

(5) In States that have set up a mechanism to provide capital improvements for child care facilities, the demand for services of such facilities still has not been met.

(6) The United States is behind other western, industrialized countries when it comes to providing child care services. In France, almost 100 percent of all children 3 to 5 years of age attend nursery school. In Germany this number is 65 to 70 percent. In Japan 90 percent of such children attend some form of preschool care. In all of these countries early childhood care has proven to increase children’s development and performance.

SEC. 953. INSURANCE FOR MORTGAGES ON NEW AND REHABILITATED CHILD CARE AND DEVELOPMENT FACILITIES.

Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding at the end the following new section:

‘MORTGAGE INSURANCE FOR CHILD CARE AND DEVELOPMENT FACILITIES

‘SEC. 257. (a) PURPOSE- The purpose of this section is to facilitate and assist in the provision and development of licensed child care and development facilities.

‘(b) GENERAL INSURANCE AUTHORITY- The Secretary may insure mortgages (including advances on such mortgages during construction) in accordance with the provisions of this section and upon such terms and conditions as the Secretary may prescribe and may make commitments for insurance of such mortgages before the date of their execution or disbursement thereon.

‘(c) ELIGIBLE MORTGAGES- To carry out the purpose of this section, the Secretary may insure any mortgage that covers a new child care and development facility, including a new addition to an existing child care and development facility (regardless of whether the existing facility is being rehabilitated), or a substantially rehabilitated child care and development facility, including equipment to be used in the operation of the facility, subject to the following conditions:

‘(1) APPROVED MORTGAGOR- The mortgage shall be executed by a mortgagor approved by the Secretary. The Secretary may, in the discretion of the Secretary, require any such mortgagor to be regulated or restricted as to charges and methods of financing and, if the mortgagor is a corporate entity, as to capital structure and rate of return. As an aid to the regulation or restriction of any mortgagor with respect to any of the foregoing matters, the Secretary may make such contracts with and acquire for not more than $100 such stock or interest in

such mortgagor as the Secretary may consider necessary. Any stock or interest so purchased shall be paid for out of the General Insurance Fund, and shall be redeemed by the mortgagor at par upon the termination of all obligations of the Secretary under the insurance.

‘(2) PRINCIPAL OBLIGATION- The mortgage shall involve a principal obligation in an amount not to exceed 90 percent of the estimated value of the property or project, or 95 percent of the estimated value of the property or project in the case of a mortgagor that is a private nonprofit corporation or association (as such term is defined pursuant to section 221(d)(3)), including--

‘(A) equipment to be used in the operation of the facility when the proposed improvements are completed and the equipment is installed; or

‘(B) a solar energy system (as defined in subparagraph (3) of the last paragraph of section 2(a)) or residential energy conservation measures (as defined in subparagraphs (A) through (G) and (I) of section 210(11) of the National Energy Conservation Policy Act), in cases in which the Secretary determines that such measures are in addition to those required under the minimum property standards and will be cost-effective over the life of the measure.

‘(3) AMORTIZATION AND INTEREST- The mortgage shall--

‘(A) provide for complete amortization by periodic payments under such terms as the Secretary shall prescribe;

‘(B) have a maturity satisfactory to the Secretary, but in no event longer than 25 years; and

‘(C) bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee, and the Secretary shall not issue any regulations or establish any terms or conditions that interfere with the ability of the mortgagor and mortgagee to determine the interest rate.

‘(d) CERTIFICATION BY CHILDREN’S DEVELOPMENT COMMISSION- The Secretary may not insure a mortgage under this section unless the Children’s Development Commission established under section 258 certifies that the facility is in compliance, or will be in compliance not later than 12 months after such certification, with--

‘(1) any laws, standards, and requirements applicable to such facilities under the laws of the State, municipality, or other unit of general local government in which the facility is or is to be located; and

‘(2) after the effective date of the standards and requirements established under section 258(c)(2), such standards and requirements.

‘(e) RELEASE- The Secretary may consent to the release of a part or parts of the mortgaged property or project from the lien of any mortgage insured under this section upon such terms and conditions as the Secretary may prescribe.

of section 207 shall apply to mortgages insured under this section, except that all references in such subsections to section 207 shall be considered, for purposes of mortgage insurance under this section, to refer to this section.

‘(g) MORTGAGE INSURANCE FOR FIRE SAFETY EQUIPMENT LOANS-

‘(1) AUTHORITY- The Secretary may, upon such terms and condition as the Secretary may prescribe, make commitments to insure and insure loans made by financial institutions or other approved mortgagees to child care and development facilities to provide for the purchase and installation of fire safety equipment necessary for compliance with the 1967 edition of the Life Safety Code of the National Fire Protection Association (or any subsequent edition specified by the Secretary of Health and Human Services).

‘(2) LOAN REQUIREMENTS- To be eligible for insurance under this subsection a loan shall--

‘(A) not exceed the Secretary’s estimate of the reasonable cost of the equipment fully installed;

‘(B) bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee;

‘(C) have a maturity satisfactory to the Secretary;

‘(D) be made by a financial institution or other mortgagee approved by the Secretary as eligible for insurance under section 2 or a mortgagee approved under section 203(b)(1);

‘(E) comply with other such terms, conditions, and restrictions as the Secretary may prescribe; and

‘(F) be made with respect to a child care and development facility that complies with the requirement under subsection (d).

‘(3) INSURANCE REQUIREMENTS- The provisions of paragraphs (5), (6), (7), (9), and (10) of section 220(h) shall apply to loans insured under this subsection, except that all references in such paragraphs to home improvement loans shall be considered, for purposes of this subsection, to refer to loans under this subsection. The provisions of subsections (c), (d), and (h) of section 2 shall apply to loans insured under this subsection, except that all references in such subsections to ‘this section’ or ‘this title’ shall be considered, for purposes of this subsection, to refer to this subsection.

‘(h) SCHEDULES AND DEADLINES- The Secretary shall establish schedules and deadlines for the processing and approval (or provision of notice of disapproval) of applications for mortgage insurance under this section.

‘(i) DEFINITIONS- For the purposes of this section, the following definitions shall apply:

‘(1) CHILD CARE AND DEVELOPMENT FACILITY- The term ‘child care and development facility’ means a public facility, proprietary facility, or facility of a private nonprofit corporation or association that--

‘(A) has as its purpose the care and development of children less than 12 years of age; and

‘(B) is licensed or regulated by the State in which it is located (or, if there is no State law providing for such licensing and regulation by the State, by the municipality or other political subdivision in which the facility is located).

The term does not include facilities for school-age children primarily for use during normal school hours. The term includes facilities for training individuals to provide child care and development services.

‘(2) EQUIPMENT- The term ‘equipment’ includes machinery, utilities, and built-in equipment and any necessary enclosures or structures to house them, and any other items necessary for the functioning of a particular facility as a child care and development facility, including necessary furniture. Such term includes books, curricular, and program materials.

‘(3) MORTGAGE; FIRST MORTGAGE; MORTGAGEE- The term ‘mortgage’ means a first mortgage on real estate in fee simple, or on the interest of either the lessor or lessee thereof under a lease having a period of not less than 7 years to run beyond the maturity date of the mortgage. The term ‘first mortgage’ means such classes of first liens as are commonly given to secure advances (including advances during construction) on, or the unpaid purchase price of, real estate under the laws of the State in which the real estate is located, together with the credit instrument or instruments (if any) secured thereby, and any mortgage may be in the form of one or more trust mortgages or mortgage indentures or deeds of trust, securing notes, bonds, or other credit instruments, and, by the same instrument or by a separate instrument, may create a security interest in initial equipment, whether or not attached to the realty. The term ‘mortgagor’ has the meaning given the term in section 207(a).

‘(j) LIMITATION ON INSURANCE AUTHORITY-

‘(1) TERMINATION- No mortgage may be insured under this section or section 223(h) after September 30, 2005, except pursuant to a commitment to insure issued on or before such date.

‘(2) AGGREGATE PRINCIPAL AMOUNT LIMITATION- The aggregate principal amount of mortgages for which the Secretary enters into commitments to insure under this section or section 223(h) on or before the date under paragraph (1) may not exceed $2,000,000,000. If, upon the date under paragraph (1), the aggregate insurance authority provided under this paragraph has not been fully used, the Secretary of the Treasury shall submit a report to the Congress evaluating the need for continued mortgage insurance under this section.’.

‘(k) REGULATIONS- The Secretary shall issue any regulations necessary to carry out this section. In issuing such regulations, the Secretary shall consult with the Secretary of Health and Human Services with respect to any aspects of the regulations regarding child care and development facilities.’.

SEC. 954. INSURANCE FOR MORTGAGES FOR ACQUISITION OR REFINANCING DEBT OF EXISTING CHILD CARE AND DEVELOPMENT FACILITIES.

Section 223 of the National Housing Act (12 U.S.C. 1715n) is amended by adding at the end the following new subsection:

‘(h) MORTGAGE INSURANCE FOR PURCHASE OR REFINANCING OF EXISTING CHILD CARE AND DEVELOPMENT FACILITIES-

‘(1) AUTHORITY- Notwithstanding any other provision of this Act, the Secretary may insure under any section of this title a mortgage executed

in connection with the purchase or refinancing of an existing child care and development facility, the purchase of a structure to serve as a child care and development facility, or the refinancing of existing debt of an existing child care and development facility.

‘(2) PURCHASE OF EXISTING FACILITIES AND STRUCTURES- In the case of the purchase under this subsection of an existing child care and development facility or purchase of an existing structure to serve as such a facility, the Secretary shall prescribe any terms and conditions that the Secretary considers necessary to ensure that--

‘(A) the facility or structure purchased continues to be used as a child care and development facility; and

‘(B) the facility complies with the same requirements applicable under subsections (d) and (e) of section 257 to facilities having mortgages insured under such section.

‘(3) REFINANCING OF EXISTING FACILITIES- In the case of refinancing of an existing child care and development facility, the Secretary shall prescribe any terms and conditions that the Secretary considers necessary to ensure that--

‘(A) the refinancing is used to lower the monthly debt service costs (taking into account any fees or charges connected with such refinancing) of the existing facility;

‘(B) the proceeds of any refinancing will be employed only to retire the existing indebtedness and pay the necessary cost of refinancing on the existing facility;

‘(C) the existing facility is economically viable; and

‘(D) the facility complies with the same requirements applicable under section 257(d) to facilities having mortgages insured under such section.

‘(4) DEFINITIONS- For purposes of this subsection, the terms defined in section 257(i) shall have the same meanings as provided under such section.

‘(5) LIMITATION ON INSURANCE AUTHORITY- The authority of the Secretary to enter into commitments to insure mortgages under this subsection is subject to the limitations under section 257(j).’.

SEC. 955. CHILDREN’S DEVELOPMENT COMMISSION.

Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding at the end (after section 257, as added by section 953 of this Act) the following new section:

‘CHILDREN’S DEVELOPMENT COMMISSION

‘SEC. 258. (a) ESTABLISHMENT- There is hereby established a commission to be known as the Children’s Development Commission.

‘(b) MEMBERSHIP-

‘(1) APPOINTMENT- The Commission shall be composed of 7 members appointed by the President, not later than the expiration of the 3-month period beginning upon the enactment of this section, by and with the advice and consent of the Senate, as follows:

‘(A) 1 member shall be appointed from among 3 individuals recommended by the Secretary of Housing and Urban Development or the Secretary’s designee.

‘(B) 1 member shall be appointed from among 3 individuals recommended by the Secretary of Health and Human Services or the Secretary’s designee.

‘(C) 1 member shall be appointed from among 3 individuals recommended by the Secretary of the Treasury or the Secretary’s designee.

‘(D) 4 members shall be appointed from among 12 individuals recommended jointly by the Speaker of the House of Representatives, the Majority Leader of the Senate, Minority Leader of the House of Representatives, the Minority Leader of the Senate.

‘(2) QUALIFICATIONS OF CONGRESSIONALLY RECOMMENDED MEMBERS- Of the members appointed under paragraph (1)(D)--

‘(A) each shall be an individual who actively participates or is employed in the field of child care and has academic, licensing, or other credentials relating to such participation or employment; and

‘(B) not more than 2 may be of the same political party.

‘(3) TERMS- Each appointed member of the Commission shall serve for a term of 3 years.

‘(4) VACANCIES- Any member appointed to fill a vacancy occurring before the expiration

of the term for which the member’s predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member’s term until a successor has taken office. A vacancy in the Commission shall be filled in the manner in which the original appointment was made.

‘(5) CHAIRPERSON- The chairperson of the Commission shall be designated by the President at the time of appointment.

‘(6) QUORUM- A majority of the members of the Commission shall constitute a quorum for the transaction of business.

‘(7) VOTING- Each member of the Commission shall be entitled to 1 vote, which shall be equal to the vote of every other member of the Commission.

‘(8) PROHIBITION ON ADDITIONAL PAY- Members of the Commission shall serve without compensation, but shall be reimbursed for travel, subsistence, and other necessary expenses incurred in the performance of their duties as members of the Commission.

‘(c) FUNCTIONS- The Commission shall carry out the following functions:

‘(1) CERTIFICATION OF COMPLIANCE- The Commission shall collect such information and make such determinations as may be necessary to determine, for purposes of section 257(d), whether child care and development facilities comply, or will be in compliance within 12 months, with--

‘(A) any laws, standards, and requirements applicable to such facilities under the laws of the State, municipality, or other unit of general local government in which the facility is or is to be located, and

‘(B) after the effective date of the standards and requirements established under paragraph (2), such standards and requirements,

and shall issue certifications of such compliance.

‘(2) ESTABLISHMENT OF STANDARDS-

‘(A) STUDY- Not later than 12 months after the date on which appointment of initial membership of the Commission is completed, the Commission, in consultation with the Secretary of Housing and Urban Development and the Secretary of Health and Human Services, shall conduct a study to determine the laws, standards, and requirements referred to in paragraph (1)(A) that are applicable in each State. Taking into consideration the findings of the study, the Secretary shall establish standards and requirements regarding child care and development facilities that are designed to ensure that mortgage insurance is provided under section 257 and section 223(h) only for safe, clean, and healthy facilities that provide appropriate care and development services for children.

‘(B) PUBLICATION- The Commission shall issue regulations providing for the standards and requirements established under subparagraph (A) to take effect, for purposes of sections 257(d)(2) and 223(h)(2)(B) and paragraph (1)(B) of this section, not later than 18 months after the date of the enactment of this section.

‘(3) SMALL PURPOSE LOANS- The Commission shall, to the extent amounts are made available for such purpose pursuant to subsection (i) and qualified requests are received, make loans, directly or indirectly to providers of child care and development facilities for reconstruction or renovation of such facilities, subject to the following requirements:

‘(A) Loans under this paragraph shall be made only for such facilities that are financially and operationally viable, as determined under standards and guidelines to be established by the Commission.

‘(B) The aggregate amount of loans made under this paragraph to a single borrower may not exceed $50,000.

‘(C) A loan made under this paragraph may not have a term to maturity exceeding 7 years.

‘(D) Loans under this paragraph shall bear interest at rates and be made under such other conditions and terms as the Commission shall provide.

‘(4) NOTIFICATION- The Commission shall take such actions as may be necessary to publicize the availability of the programs for mortgage insurance under sections 257 and 223(h) and loans under paragraph (3) of this subsection in a manner that ensures that information concerning such programs will be available to child care providers throughout the United States.

‘(5) LIABILITY INSURANCE- Not later than 12 months after the date on which appointment of initial membership of the Commission is completed, the Commission shall establish standards and guidelines, applicable to mortgage insurance under sections 257 and 223(h) and loans under paragraph (3) of this subsection, requiring child care providers operating child care and development facilities assisted under such provisions to obtain and maintain liability insurance in such amounts and subject to such requirements as the Commission considers appropriate.

‘(6) RESEARCH FOUNDATION- Not later than 12 months after the date of the enactment of this section, the Commission shall submit a report to the Congress recommending a plan for establishing and funding a foundation that is an entity independent

of the Commission (but which maintains association with the Commission), the purpose of which shall be--

‘(A) to support research relating to child care and development facilities;

‘(C) to engage in activities and publish materials to assist persons interested in mortgage insurance under sections 257 and 223(h) and other assistance provided by the Commission.

‘(d) NONDISCRIMINATION REQUIREMENT-

‘(1) IN GENERAL- The Commission may not certify under subsection (c)(1) or carry out any activities of the Commission with respect to any child care and development facility if the provider of the facility discriminates on account of race, color, religion (subject to paragraph (2)), national origin, sex (to the extent provided in title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.)), or handicapping condition.

‘(2) FACILITIES OF RELIGIOUS ORGANIZATIONS- The prohibition with respect to religion shall not apply to a child care and development facility which is controlled by or which is closely identified with the tenets of a particular religious organization if the application of this subsection would not be consistent with the religious tenets of such organization.

‘(3) CERTIFICATION- As a condition of certification under subsection (c)(1) and eligibility for a loan under subsection (c)(3), the provider of a child care and development facility shall certify to the Commission that the provider does not discriminate, as required by the provisions of paragraph (1) of this subsection.

‘(e) POWERS-

‘(1) ASSISTANCE FROM FEDERAL AGENCIES- The Commission may secure directly from any department or agency of the Federal Government such information as the Commission may require for carrying out its functions. Upon request of the Commission, any such department or agency shall furnish such information.

‘(2) ASSISTANCE FROM GENERAL SERVICES ADMINISTRATION- The Administrator of General Services shall provide to the Commission, on a reimbursable basis, such administrative support services as the Commission may request.

‘(3) ASSISTANCE FROM DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT- Upon the request of the Commission, the Secretary of Housing and Urban Development shall, to the extent possible and subject to the discretion of the Secretary, detail any of the personnel of the Department of Housing and Urban Development, on a nonreimbursable basis, to assist the Commission in carrying out its functions under this section.

‘(4) MAILS- The Commission may use the United States mails in the same manner and under the same conditions as other Federal agencies.

‘(f) STAFF-

‘(1) EXECUTIVE DIRECTOR- The Commission shall appoint an executive director of the Board, who shall be compensated at a rate fixed by the Commission, but which shall not exceed the rate established for level I of the Executive Schedule under title 5, United States Code.

‘(2) OTHER PERSONNEL- In addition to the executive director, the Commission may appoint and fix the compensation of such personnel as the Commission considers necessary, in accordance with the provisions of title 5, United States Code, governing appointments to the competitive service, and the provisions of chapter 51 and subchapter III of chapter 53 of such title, relating to classification and General Schedule pay rates.

‘(g) REPORTS- Not later than March 31 of each year, the Commission shall submit a report to the President and the Congress regarding the operations and activities of the Commission during the preceding calendar year. Each annual report shall include a copy of the Commission’s financial statements and such information and other evidence as is necessary to demonstrate that the activities of the Commission during the year for which the report is made. The Commission may also submit reports to the Congress and President at such other times as the Commission deems desirable.

‘(h) DEFINITIONS- For purposes of this section, the terms defined in section 257(i) shall have the same meanings as provided under such section.

‘(i) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to the Commission to carry out this section $10,000,000 for fiscal year 1999, to remain available until expended, of which not more than $2,500,000 shall be available for administrative costs of the Commission and the remainder of which shall be available only for loans under subsection (c)(3).’.

The Secretary of the Treasury shall conduct a study of the secondary mortgage markets to determine--

(1) whether such a market exists for purchase of mortgages eligible for insurance under sections 223(h) and 257 of the National Housing Act (as added by this Act);

(2) whether such a market would affect the availability of credit available for development of child care and development facilities or would lower development costs of such facilities; and

(3) the extent to which such a market or other activities to provide credit enhancement for child care and development facilities loans is needed to meet the demand for such facilities.

The Secretary of the Treasury shall submit to the Congress a report regarding the results of the study conducted under this section not later than the expiration of the 2-year period beginning on the date of the enactment of this Act.

Subtitle C--Sense of the Congress

SEC. 971. SENSE OF THE CONGRESS.

It is the sense of the Congress that funds should be appropriated pursuant to this Act, to the maximum extent authorized and consistently with achieving a balanced Federal budget.